Recruiting in China

China is to build up to 5,000 "bases" in 2009 to provide internship positions for the young to better prepare them for the job market as it feels pain amid the global financial crisis.

The Chinese Communist Youth League, a government body for work related to the young, will coordinate in recruiting qualified companies and individuals, the League told Xinhua Monday.

The youth leagues at municipal or provincial levels will select suitable companies to form the "bases", businesses or sets of businesses which will be able to provide positions for at least 10 interns each year with basic living allowances.

Qualified candidates for the intern positions are job-hunting fresh university or vocational school graduates, those who have failed to find a job since graduation, young laid-off workers, and young migrant workers.

The first group of nearly 2,000 such bases are already selected and made public, offering about 60,000 positions in the industries of finance, publishing, telecommunications, manufacturing and transportation.

The aim of this move is to ease the employment pressure and achieve a win-win situation between the companies and the youths, according to the Youth League.

The Ministry of Human Resources and Social Security (MOHRSS) said on January 20 that there would be 7.1 million college graduates seeking vacancies this year, including 1 million of those having failed to secure jobs last year.

The ministry also said, as of the end of 2008, there were 8.86 million urban residents registered as jobless, 560,000 more than the end of the third quarter.

New York, NY, United States, — The global financial turmoil that has led to tens of thousands of job losses in financial services has provided China with a golden opportunity to attract its overseas professionals, especially those at the high end, to return. However, the media coverage of China’s global talent hunt has left me feeling sick.
Here is a summary of what I have read:

A Ms. Yu, 43, who flew all the way from Charlotte, North Carolina, to New York City for a recruiting event, pitched hard to the recruiter sitting in front of her. “I’ve got experience in risk management,” she explained, naming the bank where she had worked and watching anxiously as the recruiter scribbled on her résumé. She breathed a sigh of relief when her résumé was placed in the review pile, implying that she might be called back for another round of interviews.

Close to 1,000 jobseekers traveled quite a distance by either flying or driving up to 10 hours to the New York event. Their wait in line for more than an hour ended up with a three-minute interview.

Some of the jobseekers who had worked in financial services for more than a decade said that their annual salary was somewhere between US$500,000 and $1 million dollars. But potential employers hinted that the highest pay available to them in China would be 1.5 million yuan (US$219,000).

Jobseekers traveled to the recruiting event on their own, waited in line for more than one hour for the opportunity of a three-minute interview, a recruiter scribbled on their résumés, and jobseekers were forced to reduce their salary expectations dramatically. This supposedly serious recruiting exercise seemed to me more like a bazaar where recruiters hoped to pick up cheap Made-in-China stuff, while jobseekers put straw on their heads to indicate they were willing to sell themselves cheap.

This happened because of the information asymmetry between jobseekers and recruiters. The former, who probably had either lost their jobs or feared for their future though still employed, were eager to find a way out. They learned that China needs talent, but did not know exactly what kind of talent is in demand, what positions are open, what credentials and experience are valued, and what compensation packages would be offered. In a word, they came to these events without knowing what to expect.

Indeed, most of those jobseekers left the events empty-handed. After attending a couple such fruitless recruiting events, even those who were seriously thinking of returning to China would have to reconsider their options.

Of course, some jobseekers might be fortunate enough to land a job. But I am not convinced that those with rich overseas experience would be willing to work for significantly lower pay. Those who do not complain about the low pay are most likely not the most talented; the truly talented would surely move to higher paying jobs if they became available. The “you-get-what-you-pay-for” principle applies to global talent as well.

In the meantime, I doubt that the recruiters know what talent they should be recruiting or have the ability to hire proper people. Most likely, those on these overseas missions are not professionals. Even if they are, given that the gap between the Chinese and international financial business is at least 20 years, they would not necessarily understand the expertise of the jobseekers and would have to wait for decisions to be made by their bosses back in China when they interview applicants. Even if they find a suitable person, the recruiters may not be able to hire him or her on the spot.

Therefore, such recruiting events are a kind of “zheteng” – a popular term of 2009, roughly translatable as “wasting time” or “flip-flopping” – for both jobseekers and recruiters.

Since the global recruiting tour is not attractive to true talent, especially experienced and senior-level personnel, and since it could produce nothing more than several kilograms of résumés at best, why are the Chinese so immersed in the practice?

The recruiters would claim that their search shows a respect for talent. In fact, the reality is just the opposite. Talent was valued when Liu Bei, a hero from the famous Chinese classic the “Three Kingdoms,” paid three visits to the cottage of Zhuge Liang, whom he wished to recruit as his adviser. It is not valued in a three-minute interview; sincerity is not shown by doing things carelessly.

Therefore, rather than embarking on an overseas talent hunt, China would be better off following the international norm.

First, Chinese institutions should place advertisements in media or on the Internet with such information as positions available, job responsibilities, working conditions, compensation and number of recruits required. If there are appropriate applicants, recruiters could chat with them over the phone first, shortlist them and invite them to China for face-to-face interviews. Finally, the employers should offer them jobs and sign contracts. In this way, both jobseekers and recruiters could avoid blind expectations and make the process more efficient.

As far as I know, few Chinese organizations would fly jobseekers to China for interviews. The return of overseas professionals, in addition to compensation, also is constrained by such equally important factors as the education of children and the arrangement of family life. Therefore, if China really wants to take advantage of the downturn and the widespread job losses to poach back much needed talent, it has to be innovative and concrete in these aspects.

BEIJING (Xinhua) -- McDonald's China announced on Wednesday an expansion plan to set up 175 new outlets and create more than 10,000 jobs this year on the Chinese Mainland despite global economic downturn.

The expansion was the largest of its kind ever made by McDonald's across the world.

"The move will bring more opportunities for cooperation to food-related industries in China," said McDonald's China CEO Jeffrey Schwartz.

The US-based food chain store group has 50 suppliers in China, with more than 95 percent of its food materials coming from local market.

On the same day, the group announced its decision to launch a 16.5 yuan (about $2.4) discount meal in its Chinese outlets.

"The price is even lower than that of a similar product in this market a decade ago," said Schwartz.

He added the company's management of material supply and its increasing presence in China helped cost control and made the big discount possible.

McDonald's has opened more than 1,050 outlets in China in the past two decades.

More and more Australian companies are setting up their own presence in China in order to source products/services directly from China or enter the Chinese market. However, given the alien nature of local regulations and business environment in China, it is critical to be proactive and fully prepared before you take the strategic move to set up your own presence in China.

Here are some “must-knows” before you set up the business in China:

1.You have more than one option for a local presence in China. Your China presence may be in the form of a wholly owned foreign enterprise, a contractual joint venture, an equity joint venture, a representative office or a local representation by a third party (local secretary/representation service companies).

2.Carefully define your business scope for the China presence. China National Development and Reform Commission may prohibit, restrict, permit or encourage your business set-up based on your business categorization and scope. Hence it is critical to carefully define your business scope so as to be permitted or encouraged to set up the presence.

3.Select the right location for your China operation. China abandoned its preferential tax rate for investments of foreign companies from January 1st 2008. However, some areas still offer local preferential policies for foreign investors in terms of land leasing/procurement, staff recruitment and management, local tax etc.

4.Confirm the minimum registered capital for your China operation. The Chinese government requires certain minimum registered capital for various types of businesses. However, local Industry and Commerce Administrations may decide on your minimum registered capital based on their judgement of your business scope and operation scale. You need to confirm with local government agencies the minimum registered capital through local contacts before taking any other actions in case they require an amount far above your financial resources available for the China operation.

5.Integrate commercial clauses in the Articles of Association to maximise profit repatriation into Australia. You may have commercial arrangements between your Head Office in Australia and the subsidiary in China in order to guarantee maximum profit repatriation. However, some arrangements must be included as part of the Articles of Association to be valid. The Articles of Association is to be submitted to local government agencies for approval and filing during business license registration. Hence, you must incorporate necessary clauses in the Articles of Association in the first instance.

6.Fully understand employers’ responsibilities and liabilities in China. China issued the new Law of Labour in 2007 which specified issues on employment contract, redundancy, etc. Without preliminary knowledge of this law, you may end up spending a huge amount of time and money terminating the contract with under performing employees, as the structure of the contract was wrong. You also need to be aware of the mandatory employee welfare and benefits so as to include such cost in the budget.

7.Conduct thorough due diligence and credit check on your joint venture partners. Your partners may not be what they claim to be. China has the business culture to show their wealth and status by driving luxurious cars, wearing prestigious watches and owning an impressive factory. Hence your Chinese business partners may look financially viable and well connected but, as a matter of fact, live on bank loans and personal debts.

8.Develop a comprehensive local employee management system. It is a hard job to recruit the right staff in a foreign country. It is even harder to effectively manage the local staff in a foreign country. A sound and robust employee management system will encourage the engagement and commitment of local staff and avoid potential risks. You may include reporting and communication policies, staff training, performance assessment, remuneration, career management and employee management manual in the system.

Business set-up in China is a big project by itself, which requires financial and time commitments, business management knowledge and China expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls.

Information above is provided by Sara Cheng, Manager for Greater China, Australian Business International Trade Services.

While some companies around the world are responding to the financial crisis with job cuts, the newly issued 3G licenses in China have caused Ericsson to plan a hiring spree of several hundred new employees in China in 2009.

Chinese media previously reported that Ericsson China would cut 150 staff in March 2009, accounting for 5% of its Chinese employees. This was said to be a part of Ericsson's global layoff of 5,000 people. However, a representative from the human resources department of Ericsson China denies the rumor and says their pressure now is from recruitment, not layoffs. Ericsson's technology department in China will hire several hundred new employees this year and its telecommunications service department also needs new blood.

In China Unicom's 3G network construction tender, Ericsson is one of the major winners. China Mobile's chairman Wang Jianzhou also said at the end of January 2009 that the company planned to include Ericsson in the list of its 3G network equipment suppliers.

In its latest financial report published in January 2009, Ericsson said it was seeking to further cut costs by such measures as cutting 5,000 employees, aiming to save SEK10 billion annually before the second half of 2010.

China Unicom is looking to hire managers for three subsidiaries focused on the development of innovative value-added services, according to a company announcement on Jan. 21.

Unicom NewSpace, China Unicom's subsidiary responsible for value-added service development and operations, and its two newly-established subsidiaries respectively responsible for music services and video services, will hire nine managers with experience in music services, video services, Internet advertising, IM and SNS.

By recruiting experienced managers, the company hopes to further develop its broadband, mobile and Internet services, particularly in time for its 3G launch.

China Unicom said previously that it aims to have a profitable WCDMA business by 2010, and innovative 3G value-added services will be crucial.

According to a CCID Consulting report, successful 3G operators will need to develop pioneering applications as well as provide individual and customized services for users.